But fintechs like Monzo, which have received huge investments up front, face a major funding challenge as venture capitalists and other investors become cautious. To cut costs, Monzo CEO Tom Blomfield will not take a salary for the next 12 months and the bank has furloughed some employees and closed a customer service office in the US.

Monzo is not the only darling of fintech to be hit by the slowdown. Peer-to-peer lender LendingClub, which was an early market entry after being launched in the US in 2007, recently announced it was laying off hundreds of staff as demand for its lending service falls during the Covid-19 crisis. The company is cutting 460 staff, about one-third of its total workforce, and has also announced temporary 25% pay cuts for senior executives, with the salary of its CEO cut by 30%.

Monzo and LendingClub are well established with a large customer base, so will still attract investment, albeit with a reduced valuation, but less prominent fintechs face extreme uncertainty.

According to analyst company Forrester, the current crisis will be no different from previous economic downturns in making investment funds – the lifeblood of fintechs – scarce.

“The last two economic downturns saw a huge reduction in private financing,” said Forrester in a recent report. “This time won’t be different. Only fintechs that had market traction, were profitable or had secured a big funding round before Covid-19 struck will survive the upcoming consolidation.”

Last month, Russ Shaw, founder of tech startup network Tech London Advocates, said announcements such as Monzo’s are no surprise in view of what is going on globally. “Most companies are battening down the hatches, furloughing people if they can, laying people off or people taking pay cuts or not being paid at all,” he said. “This is due to uncertainty and the fact that they are seeing softness in their business.”